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Pentair and Tyco International’s Flow Control business to combine

Pentair and Tyco International have entered into an agreement to combine Tyco’s Flow Control business with Pentair in a tax-free, all-stock merger.

The combination will bring together complementary players in water and fluid solutions, valves and controls, and equipment protection products to create merged company with estimated 2012 revenues of US$7.7 billion.

According to a report in Global Water Intelligence, Tyco has been gradually selling off its water interests, offloading Earth Tech in 2008 and selling parts of its valves business to Talis in 2010 and 2011. Its remaining water and environment business is expected to generate around $800 million in revenues in 2012, and will help the ‘new’ Pentair to generate around 45% of its sales (US$3.5 billion) from the water and fluid solutions business this year.

The merged company aims to have a broader presence in key sectors with greater opportunity to capitalise on growth trends in the energy, infrastructure and industrial sectors.

The new company will be named Pentair and will be led by Randall J. Hogan, Pentair’s current Chairman and CEO.

Hogan said, "The addition of Tyco Flow perfectly aligns with Pentair’s growth strategy to expand globally, invest in high growth platforms and leverage the Pentair Integrated Management System to generate strong shareholder returns.

"We believe that by combining with Tyco Flow, we can unlock substantial synergies, meaningfully increase our global presence and better serve our customers with a broader offering and expanded capabilities.

"The new Pentair will be well positioned to benefit from the increased demands on energy, water, infrastructure and industrial process resulting from the growing population and wealth of developing economies."

"We look forward to welcoming the Tyco Flow employees to Pentair," added Hogan.

Upon close of the transaction, Pentair’s Board of Directors, together with two new directors designated by Tyco, will be the Board of Directors of the combined company. The combined company will be incorporated in Switzerland, where Tyco is currently incorporated, with main U.S. offices remaining in Minnesota where Pentair is based.

Following completion of the transaction, the new Pentair is expected to have approximately 30,000 employees worldwide with approximately 15,000 coming from Pentair and 15,000 joining from Tyco Flow.

Pentair Water and Fluid Solutions is a provider of water and fluid processing products and solutions. Pentair Technical Products is a provider of products that enclose and protect some of the world’s most sensitive electronics and electrical equipment, ensuring their safe, secure and reliable performance.

[Image above courtesy Pentair.]

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